The Australian dollar depreciated past $0.685 on Friday, hitting its lowest levels in two years, as commodity currencies came under pressure from the Federal Reserve’s aggressive tightening plans and an escalating risk of a global recession. There are also hints that the Australian economy is cooling with house prices slipping and consumer sentiment in a deep hole. The aussie also weakened despite expectations that the Reserve Bank of Australia will deliver another half-point rate increase next week, following a larger-than-expected 50 basis point rate hike in June. Markets are betting for the central bank to bring rates up to 3.25% by year-end. RBA Governor Philip Lowe recently flagged more tightening ahead as rates were still ”very low” and as he sees inflation hitting 7% by year-end, but downplayed the chance of a super-sized 75 bps rate increase.
Historically, the Australian Dollar reached an all time high of 1.49 in December of 1973. Australian Dollar - data, forecasts, historical chart - was last updated on July of 2022.
The Australian Dollar is expected to trade at 0.67 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 0.64 in 12 months time.